Cars are almost ranked second after houses in terms of a person’s desire. Who wouldn’t? Having your own car can give you privacy, privilege, and freedom in transportation. No more hassles in commuting. It goes to say that cars are something that many people hope to cross off from their bucket list.
However, there are many factors that you should be thinking of when you are deciding on buying a car, and one of them is about car loans. Many people see car loans as an opportunity to be able to obtain an automobile without creating a one-time significant impact on one’s finances. But, some people don’t know much about the said loans.
You might see a car and want to decide on its ownership hastily. However, you might be digging a financial grave yourself, being entirely unaware of the consequences. Fortunately, there are ways to get your car loan approved. Want to know how not to be declined? Here’s how it can be possible!
1Evaluate Your Financial Status
Are you in debt? Or is your cash flow good? These two questions are just one of the many things that you should consider when you are evaluating your financial status before talking to a lender.
There are three things that you might want to evaluate thoroughly: income, credit history, debt-to-service ratio, and even the percentage of the profit that goes through you monthly towards your car payments. These are the factors that car lenders are particular about.
If you can, it is recommended that you consult a financial advisor to help you out in identifying if your financial status is in an excellent position to apply for a car loan.
2Set Aside a Budget
Set aside a budget or save money solely for buying a car. Saving for its downpayment is one of the most important things that you can do to have your car loan approved. Let’s be honest; most lenders might not consider you if you don’t have or if you are not willing to invest a significant amount upfront.
Start with a 20 percent downpayment; it is an amount which is good to start with. However, also consider putting more money down if it is still within your budget.
3Don’t Go Overboard
Simply put, stick to your limits. There might be other cars that might pique your interest, or you would really be tempted to buy, but if it is beyond your budget, remind yourself why you are buying the car in the first place to keep your thoughts and logic in line.
After evaluating where your finances stand, and you are now pre-approved, you will be able to identify your car’s loan duration and how much you will spend on it every month that your income can reasonably take.
Be sure that you will not let the lenders lead you to spend much on a car loan. Be alert and smart enough to keep your payment within your means.
4Be Informed About Car Loan Requirements
Just because all car lenders sell the same item, means to say that they have the same requirements. Different lenders have different sets of requirements for each of the clients they have. Thus, do your assignment and research what is possibly required of you for the loan/lender you are interested in.
For example, the lender is quite particular on the years you have stayed on your job, or your tax return for the last two to three years. Documents like those are often required or asked by lenders. Thus it would be best if you prepared beforehand so that you will be able to have your car loan approved.
5Don’t Cheat Your Financial Details
Never lie about details in your loan application since lenders are sure to double-check every information that you provide them. Now, if you have inflated your income, for instance, then there is a high chance that not only your loan will get denied, but the chances of getting any loan in the future might be as well rejected.
Not only that, but you can also end up facing criminal charges for falsifying information. Thus, if you ever thought of this, put it in your head that the consequences are not worth it.
Last and certainly not the least, as much as possible, you should avoid any new debts so that you can focus your payment on your car loan first. With the provided advice, surely your desired car is now not a far-fetched dream, and your car loan will have a high chance of getting approved. Thus, make sure to take the discussed matters keynotes so that you will not forget the knowledge that was shared with you.